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The non-linear link between electricity consumption and temperature in Europe: A threshold panel approach

  • Bessec, Marie
  • Fouquau, Julien

This paper investigates the relationship between electricity demand and temperature in the European Union. We address this issue by means of a panel threshold regression model on 15 European countries over the last two decades. Our results confirm the non-linearity of the link between electricity consumption and temperature found in more limited geographical areas in previous studies. By distinguishing between North and South countries, we also find that this non-linear pattern is more pronounced in the warm countries. Finally, rolling regressions show that the sensitivity of electricity consumption to temperature in summer has increased in the recent period.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 5 (September)
Pages: 2705-2721

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Handle: RePEc:eee:eneeco:v:30:y:2008:i:5:p:2705-2721
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  1. Andrea Bigano & Francesco Bosello & Giuseppe Marano, 2006. "Energy Demand and Temperature: A Dynamic Panel Analysis," Working Papers 2006.112, Fondazione Eni Enrico Mattei.
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  10. Theodoros Zachariadis, 2007. "Energy Policy in Cyprus: Outlook and Major Challenges," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 1(1), pages 27-48, June.
  11. Beenstock, Michael & Goldin, Ephraim & Nabot, Dan, 1999. "The demand for electricity in Israel," Energy Economics, Elsevier, vol. 21(2), pages 168-183, April.
  12. Pardo, Angel & Meneu, Vicente & Valor, Enric, 2002. "Temperature and seasonality influences on Spanish electricity load," Energy Economics, Elsevier, vol. 24(1), pages 55-70, January.
  13. Sailor, David J. & Muñoz, J.Ricardo, 1997. "Sensitivity of electricity and natural gas consumption to climate in the U.S.A.—Methodology and results for eight states," Energy, Elsevier, vol. 22(10), pages 987-998.
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  15. Henley, Andrew & Peirson, John, 1997. "Non-linearities in Electricity Demand and Temperature: Parametric versus Non-parametric Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(1), pages 149-62, February.
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